The Swiss bank is suspected of "complicity in illegal sales practices", an official at the Paris prosecutor's office told the BBC.

It also allegedly set up a shadow accounting system that masked transfers between French and Swiss bank accounts.

UBS said it was cooperating with authorities.

Under French law, being placed under official investigation means there is "serious or consistent" evidence to implicate a suspect in a crime. But it does not necessarily lead to a trial, the official said.

The latest move follows action taken against the bank's French unit last week which was also formally placed under scrutiny on similar suspicions.

'Schmoozing with the rich'

The former head of UBS France, Patrick de Fayet, and two other local branch executives are already being investigated.

"It was France that you had to milk. The French branch of UBS was just an excuse to collect [clients] for UBS Switzerland.Nicolas Forissier, Ex-UBS staff, cited by Le Monde

Investigators are examining whether UBS staff broke a French law against "illicit solicitation" by actively approaching potential clients in France.

The allegations originally came to light after former staff blew the whistle on the practices that involved hundreds of retail and corporate clients.

An anonymous letter was reportedly sent to the regulatory arm of the French central bank suggesting that parallel accounts were opened in Switzerland but undeclared in France, which is illegal under French law.

The letter said a special record was kept between 2002-2007 listing undeclared bank accounts that had been opened by corporate clients.

According to French daily Le Monde citing former employees, UBS bankers regularly mingled with affluent people at sporting events and musical concerts - including some sponsored by UBS - in order to seek out possible clients for tax evasion.

In one example, a former marketing official at the French branch of UBS said Swiss bankers "made trips [to France] to meet 'prospects'" at events, including the tennis tournament Roland Garros.

Stephanie Gibaud said she was asked to "destroy a series of sensitive documents containing the names of current or potential clients who had participated in events organised on French territory."

Nicolas Forissier, a former internal auditor of UBS' private banking division, also told the newspaper that a special record containing a list of French clients with undeclared bank accounts was sent to the UBS' Swiss headquarters.

"It was France that you had to milk. The French branch of UBS was just an excuse to collect [clients] for UBS Switzerland," he told Le Monde.

The magistrates investigating the affair have sent a list containing the names of 353 people suspected of having held a Swiss account to Swiss authorities and have requested details, the official at the prosecutor's office told the BBC.

Crackdown

In addition to the latest investigation, UBS was also identified as a "supervised witness" on two other allegations related to money laundering and tax evasion, she added.

Supervised witness is a less serious status than a formal investigation. It means that a person must be accompanied by his or her lawyer if questioned further in the investigation.

UBS said: "We will continue working with the authorities in France within the applicable legal framework to arrive at a resolution to this matter."

In a separate statement in French, it said: "The tribunal's decision widens the probe. UBS will continue to cooperate with the French authorities. UBS will not allow any move aimed at helping clients to avoid their fiscal duties."

The latest investigation came amid a wider government crackdown on tax evasion in Europe and the United States.

In France, former French budget minister Jerome Cahuzac resigned in April after admitting he had squirreled away savings in an undeclared Swiss bank account. His ministry was responsible for tackling tax evasion.

UBS was placed under a similar investigation in 2008 in the US when it faced charges for conspiracy to defraud the US tax authority. The bank eventually paid a $780m fine to avoid prosecution and handed over data on some 4,500 bank accounts held by suspected US tax evaders.